Jeremy Grant
Senior Executive Advisor for Identity Management
National Institute of Standards and Technology

Trusted IDs: Benefits for Business

Online commerce is a critical and growing segment of the U.S. economy. A forecast of online sales projects total e-commerce sales to grow by 7 to 8 percent per year, reaching about $250 billion by 2014. Online sales allow both entrepreneurs and established businesses quick, low-cost access to potentially millions of customers, which can encourage innovation and create new jobs.

photo of construction site - courtesy: Auremar/ShutterstockThe Internet also offers business tremendous efficiencies by allowing easy communications between business partners and with remote locations to collaborate on products, telecommuting options for employees, and other benefits.

This tremendous increase in online business transactions, however, gives cyber criminals greater access to business assets than ever before, opening up risks for intellectual property theft, identity theft, and other crimes.

It's difficult to quantify the full cost of cyber crime, especially since many incidents are not reported. A 2011 government-sponsored study in the United Kingdom found that cyber crime cost 27 billion (about $44 billion) in the UK alone, with businesses bearing three-quarters of that cost. The Federal Bureau of Investigation's Crime Complaint Center (IC3) received 22% more self-reported cybercrime complaints in 2009 than the previous year — and that the dollar value of these incidents was skyrocketing, up 111% in 2009 to more than $550 million. It's clear that business is currently sustaining significant losses to cyber crime and thus has much to gain from the widespread adoption of trusted IDs.

NSTIC differs from past efforts to encourage trusted IDs in several ways. From the outset, the NSTIC has involved the private sector as a partner in the effort. The private sector has the expertise to implement the Identity Ecosystem and has already demonstrated that the technology is ready and that an emerging market for trusted IDs exists. This means that while some past efforts focused on technical solutions, NSTIC is instead focused on policy and standards to ensure interoperability.

In short, the time is right for an online identity solution. Advantages to business from the proposed NSTIC approach include:

  • Expanded markets: Just as cautious people don't park expensive cars in neighborhoods with high crime rates, some companies conducting high-value, sensitive transactions like mortgage lending or health care services have been reluctant to conduct portions of their business online. Lower rates of identity theft and cyber crime through the use of identity credentials would encourage business to develop new products or services now considered too risky for online sales or transactions.

    For many customers, registration is a significant barrier to buying something online. They don't want to take the time and risk of setting up new accounts. The identity ecosystem would allow customers to do business at new sites without extensive registration processes, while also verifying that business Web sites are authentic. They can buy with more confidence and without the hassle of establishing multiple accounts.

    Greater privacy, security, and trust in cyberspace may also encourage some customers who have avoided online transactions in the past to begin participating.

    "I think for a lot of entrepreneurs it's about saving time and giving them something that you think is not going to turn your users away . . . Somebody just needs to make it super easy."
    Philip Kaplan, serial entrepreneur, President and Founder, Blippy speaking at the Forum on National Strategy for Trusted Identities in Cyberspace.

  • Cost savings: Customers using a trusted ID would no longer need to establish accounts with every online business. Their credential could carry their credit card data and/or other personal data, such as age or place of employment, that may be needed to conduct a specific transaction. The savings to most business from not having to collect, maintain, and secure this data would be substantial. Small businesses, in particular, would benefit since the administrative and technical costs required to set up secure customer databases and IT help desks can be prohibitive.

    The increased privacy and security of online transactions would also encourage more businesses to replace paper-based documents with faster, greener, more automated electronic systems.

  • More B2B collaboration: The increasing sophistication of technology demands greater levels of collaboration among business partners. Yet these interactions also bring risks of losing intellectual property and other data. Identity credentials allow greater accountability and auditing of sensitive business to business transactions, lowering the risk and cost of collaborations, while enabling companies to leverage shared knowledge and resources.

  • Get involved: The business community will own and operate the vast majority of the services provided through the new Identity Ecosystem envisioned by NSTIC. Leadership by the private sector, through individual companies, industrial associations, standards-setting organizations, and other business-related organizations is critical to the effort's success.

  • Stay informed: Sign up to receive email alerts about upcoming NSTIC news, workshops, and other events.

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